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Apprenticeship schemes are often in the news (and not always for the right reasons), so we’ve had a look at what they are about and where you can find out more details about them.
[Updated for 2017]
Many UK businesses consider skills shortages and recruitment difficulties a big problem. Apprenticeships can be an answer as they offer work-based training programmes to employees that lead to nationally recognised qualifications.
Apprenticeship schemes can ensure companies have the right practical skills and qualifications in their workforce and ensure the company keeps up to date with the latest technology and practices. The apprentices themselves tend to be more motivated and loyal to the company that has invested in them, as they have made a choice to learn about a specific job at work. See our separate article her about interns.
There are three levels of Apprenticeship available:
More details are available from the NAS website.
Apprenticeship vacancies are found on the official website and <a https://www.findapprenticeship.service.gov.uk/apprenticeshipsearch" target="_blank" rel="noopener">here.
Apprenticeship funding is available for employers from NAS. The size of the funding you will receive varies depending on your industry sector and the age of the candidate. If the apprentice is aged 16–18 years old, you will receive 100 per cent of the cost of the training; if they are 19-23 years old, you will receive up to 50 per cent; if they are 24 years old or over you may get a contribution depending on the sector and area in which you operate.
The Government previously announced that Employers will not need to pay National Insurance Contributions for apprentices under 21 from April 2015. And in their 2014 Autumn Statement announced the extension of this to apprenticeships under 25 from April 2016 (this was confirmed in December 2015).
In the March 2015 budget a new funding scheme using Apprenticeship vouchers was announced, which is expected to be fully implemented by 2017.
The ‘AGE 16 to 24’ year olds scheme helps eligible employers to offer young people employment through the Apprenticeship programme, by providing grants to assist employers in paying their first apprentice.
NAS will provide up to 40,000 Apprenticeship grants of £1,500 to small / medium sized employers (with less than 50 employees) recruiting 16 to 24 year olds – until December 2015. Each Employer can claim for up to 5 apprentices. This is in addition to the training costs of the Apprenticeship scheme which are met in full for young people aged 16 to 18 and 50% for those aged 19 to 23.
In July the Government also launched consultation on protecting the term ‘apprenticeship’ from being diluted by unauthorised training providers who provide apprenticeships that meet only narrowly focused job needs.
On 21st September 2015 the government published the outcome of the consultation and announced they are to introduce a clause in the Enterprise Bill protecting the term ‘apprenticeship’ – it will be an offence for training providers to use the term ‘apprenticeship’ or ‘apprentice’ in relation to any course or training in England unless it applies to a government-funded apprenticeship. The new summary offence would be punishable by fine as a maximum penalty. The level of fine is currently unspecified. The offence would not apply to schemes run by employers.
Apprenticeship Training Agencies (ATA’s) – are organisations who directly employ apprentices and act as their day to day workplace and Manager and coordinate their training. A ‘host’ employer pays a fee to the ATA based on the wages and training cost of the apprentice (but is relieved of all administration surrounding the apprenticeship).
Following Theresa May becoming Prime Minister, the Department for Business, Innovation and Skills (BIS) was split up and the Government’s skills and apprenticeship policy now falls under the Department for Education (DfE).
The Government have announced they will introduce an apprenticeship levy on all large firms. In his Autumn Statement (November 2015) the Chancellor announced that the levy would come into force from 6th April 2017 – the levy will only be paid by employers’ who have pay bills of more than £3 million and a charge of 0.5% of the annual pay bill will taken as a levy. There will be a levy allowance of £15,000 per year to offset against the levy that must be paid. The levy will be paid through the PAYE process to HMRC and must be paid by all firms regardless of whether or not a business is already employing apprentices. Once an employer has paid the levy to HMRC via PAYE they will be able to access funding for apprenticeships through a new digital apprenticeship service account (although the funds will expire after 24 months if they are not spent). The funds must be spent on apprenticeship training and they will have to used approved providers. The Government will apply a 10% top-up to Employers funds (of the monthly contributions to the levy funds).
In August 2016 the Government announced that smaller firms with less than 50 employees taking on a 16-18 year-old apprentice will not be required to make any financial contribution towards the cost of the levy.
Doing a quick calculation, if you have 300 employees earning £15,000 gross per annum, then your pay bill will be 4.5 million. The levy sum of 0.5% is £22,500, less £15,000 allowance. So the annual levy to be paid is £7,500. The Government tops this up with £750 so you have £8,250 to spend.
Employers that don’t have to pay the apprenticeship levy will, by 2018, have to use the new digital apprenticeship service to pay for apprenticeship training and assesment.
You can read the latest Government Guidance on the Apprenticeship Levy here.
If you are an Employer and need ongoing professional help with any staff/freelance issue then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.
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